On "What's Moving Your Money with Spencer Hakimian," Spencer breaks down the major agricultural effects of the U.S.-China agricultural trade war, how it hurts our farmers, and what the government can do to fix it.
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00:00The United States has a full agricultural emergency on its hand, and it was brought on by bad policy.
00:10I'm here to break it all down for you.
00:17Hey everybody, I'm Spencer Akemian, and welcome back to yet another episode of What's Moving Your Money on Forbes.
00:25On today's episode, we're going to break down exactly what happened to cause this mess in our agriculture industry.
00:33How bad this is for our soybean farmers, for our corn farmers, for our wheat farmers, for our cattle ranchers, so on and so forth.
00:42And what steps our government inevitably has to take here to fix this problem, because frankly, this is not sustainable, and it's becoming an economic and political disaster.
00:54So stay right ahead.
00:56So to break this all down, I want to go back to 2018 for a minute, because I want to highlight that what is happening right now is not new.
01:04China has done this to the United States already.
01:07And when I say China has done this, they didn't start this.
01:11They were the reactionary party in this instance.
01:13The United States went out and put aggressive tariffs on China in 2018 and also in 2025.
01:21And China immediately, in both instances, boycotted buying agricultural products from the United States.
01:28It was not as severe in 2018, but in 2025, they put their foot on the gas and they put their pedal to the metal because they want to punish Americans.
01:38And they realized one of the easiest ways to exact extreme pain on the United States is by targeting the farmers.
01:48Not only does this harm the farming industry, but it also causes a lot of political discontent here in the United States.
01:58The farmers, think about where farming happens in the United States.
02:06These are the most critical political states in the United States.
02:11The outsized political power in the U.S. comes from these people.
02:15And they know, the Chinese know, that they can get a lot of concessions out of the United States if they target their pain precisely.
02:24If this pain was targeted hypothetically at California farmers, it would not be as impactful.
02:31Because Trump does not need California farmers as much as he needs farmers in Wisconsin.
02:39These are the swing states that really tend to matter.
02:43So China is doing something very intelligent by targeting a specific demographic that they know is going to cause instant pain for the American government.
02:52Now, another agricultural disaster that we have on our hands is that beef prices in the United States are soaring.
03:00This does not have to do with the Chinese.
03:02This actually has to do with South America.
03:04The Brazilians and the Argentinians and the Uruguay nation.
03:08We have put such significant tariffs on these nations that their main exports to us, one of which is beef, has gone up so much in price.
03:18And what is happening now is that American cattle ranchers are not able to export their cattle to other parts of the world, which they used to do.
03:28And as a result, their inventory is left in the United States and they are raising their prices as well because they're competing with that Brazilian, that Argentinian, all of that beef that is so much more expensive now than it was before.
03:44So they do not have an incentive to be price competitive.
03:48They've been given this license essentially to overcharge American consumers.
03:53And that's what's happening.
03:54That's why when you walk into a supermarket, ground beef prices are up 25% from a little bit ago.
04:00That's exactly what's happening.
04:02One of the economic failures of tariffs is that it lets domestic producers price gouge.
04:08And I don't use that term lightly.
04:10They are literally allowed to price gouge because their competition has went away.
04:15Think about what we've done.
04:16And who ends up paying for all of this?
04:18Us, American consumers, American households.
04:21The guy trying to feed his family that buys ground beef on the weekends.
04:26He is the person that pays for this.
04:28It's not foreigners.
04:30It's not the corporations.
04:31It's you and I.
04:32This is why tariffs historically don't work and why politicians don't like to use them.
04:38They are, first of all, economically incorrect.
04:40But they're so politically unpopular.
04:43It's a punishment on your own citizens.
04:45And it's a punishment that is not spread out evenly.
04:49Fortunately, I can afford a 25% increase in my ground beef.
04:54I'm blessed.
04:55I can afford that.
04:56What about the family that's paycheck to paycheck?
04:59They really can't afford a 25% hike in the price of their food.
05:03They literally have to cut back on their consumption of food.
05:06They have to eat less calories.
05:08This is the most basic thing.
05:10And we're not doing it effectively as a nation.
05:13And we're going to pay the consequences.
05:15So, look, guys, before I let you go, there's a few ways this can end.
05:20There's a smart way that this can end.
05:22And there's the way that's going to end up happening, unfortunately.
05:25Let's start with the smart way.
05:27The smart way is you repeal these tariffs and you refund the tariffs that were charged to businesses,
05:35to consumers, to households, so on and so forth.
05:38You reverse this policy.
05:40Fortunately, up to now, the effects of tariffs have been bad, but not catastrophic.
05:47We've been very lucky because we had that grace period.
05:51Businesses stocked up.
05:52Households stocked up.
05:54But guess what?
05:54That's done.
05:56In 2026 and 2027, that's not going to work.
06:00Maybe it worked for a few months in 2025 and it's only been bad so far.
06:05That's gone.
06:06You're going to start paying the full price of everything soon enough.
06:09The other way that this ends is that Trump keeps the tariffs on because he genuinely believes in them.
06:16However incorrect he may be, he genuinely believes in them.
06:19And what ends up happening is he will give a dividend check from the tariffs to consumers.
06:27This will likely come before the 2026 midterms because they know that these are unpopular.
06:33They see the polling.
06:34They see this is Trump's weakest issue.
06:37So they have to do something to incentivize consumers to give them a little bit more leeway.
06:43And the easiest way historically to buy votes is to pay them.
06:48You see it in 2020.
06:49You saw it in 2021.
06:51Regardless of political party.
06:52I'm not a Republican.
06:53I'm not a Democrat.
06:54I'm just an American.
06:56But you've seen this regardless of political party.
06:58They buy votes.
06:59So what will end up happening, in my opinion, is tariffs will remain in place unless the Supreme Court overrules them, which remains to be seen.
07:07But Trump is going to increasingly give out checks that he collected from tariffs, which is very strange, by the way.
07:16It's taxing someone's right pocket to put it back in their left pocket.
07:19Why don't you just don't tax anyone to begin with, right?
07:22Like, isn't that, like, a better idea?
07:24But that's what's going to end up happening here.
07:26But ultimately, it's not going to be enough.
07:29Because as much as they want to refund, it will not excuse the chaos.
07:34It will not excuse the rise in consumer prices.
07:38It will not excuse the lack of business hiring due to all of this uncertainty.
07:43And we'll ultimately see how this plays out politically in 2026.
07:47Guys, thank you very much for watching, and I welcome all your comments and thoughts as always.
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